Most headlines about market activity attempt to connect two dots where no connection may exist. So I tend to ignore them. Half the time, the headline isn't even what the article is about. They would have been better off leaving small investors out of it.

I think the conventional wisdom is that by the time the small investors come back to the market, they are late to the game.
All the more reason I keep to the passive index allocation path. If I was not in the retirement stage of life (as in no more accumulation) I might take a different tack; but I do not know what that would have been - sell, buy, hide, worry?
Rich

As an "Emerging Boglehead", I would like to think I am above such headlines. Alas, as there is still that part of me which has not quite made the transition, I did take note. Where I came out was here: the only things over which I have control are my risk exposure (asset allocation) and my capacity to follow through on my plan (rebalancing when I am out of my band). To that end I turned on some music and started dinner for the kids.

What the headline tells us is just that stocks have been rising recently... and that public memory is short... and that, best of all, the 2009 bottom is now still close enough to three years ago that every stock fund is showing great three-year return numbers.

Not at all,,,It is pretty much normal after a severe decline in stock market cycles.The "average investor" usually starts to buy in long after the biggest gains have been made since the bottom of the bear market.The S&P is up 126% since the March 2009 bottom of 667.00.Just a guess,but I'm thinking we might be somewhere between the confidence and enthusiasm stage this time around

"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

I'll start getting concerned when there is a new reality show featuring day traders, and my local newspaper starts doing interviews of those with great (self reported) success stories.

There have been a lot of posts on Bogleheads lately about "getting back into the market", and a lot of hesitancy about actually pulling the trigger. It will be time to worry when we start seeing a lot of new posts saying, "I finally did it!"

reggiesimpson wrote:Todays WSJ commented that equities are at a five year high and the "chart" is getting ominous. I plan on selling the few stocks i have left and i wont look back. Taking a profit is called winning.

My brother, who is a day trader for a company, told me he sold all of his personal US and international stock funds today. He is usually pretty on track. Reggie, if you sell all of your stocks, does that mean you will be 100% bonds? Not wishing to argue at all, but won't that mean locking in an inflation losing situation forever or are you planning to reenter the stock market?

What's troubling - the headline itself or small investors buying high again? Whatever, I liked this last quote from the article: "But Russ Koesterich, the chief investment strategist at BlackRock, said that the current threats were “mundane” in comparison to what investors had faced over the last few years. “We’re not talking about big crises anymore,” Mr. Koesterich said.

I launder my charitable giving through my taxable brokerage account when it makes sense - so gains are good. By donating you raise your cost basis for cap gains taxable purposes and give away unrealized gains rather than earnings while getting the full tax deduction as if it had been cash. Just initiated charitable transfer of a passle of stock today while the price was high. At the same time set up a transfer of cash back into the account to re-buy what I gave away.

And I started shorting the S&P 500 a week ago thinking it can't go much higher. Still waiting on that one, but I'm still hopeful for a Really Bad Day sometime in the next month or so. I haven't been to Las Vegas since Labor Day, so this is all I got.

reggiesimpson wrote:Todays WSJ commented that equities are at a five year high and the "chart" is getting ominous. I plan on selling the few stocks i have left and i wont look back. Taking a profit is called winning.

My brother, who is a day trader for a company, told me he sold all of his personal US and international stock funds today. He is usually pretty on track. Reggie, if you sell all of your stocks, does that mean you will be 100% bonds? Not wishing to argue at all, but won't that mean locking in an inflation losing situation forever or are you planning to reenter the stock market.
No i dont plan on re entering into equities unless and when there is another large drop. I am up comfortably in my remaining stock holdings and will sell for a tidy profit
I have been largely in a bond ladder for decades with an eye to retirement living which is where i am presently at. I have no problem buying bonds as they provide a cash flow that i can use not only to live on but to reinvest the excess cash in whatever makes sense at the time. Typically more bonds. I realize this is not typical BH philosophy but i am in retirement and my earning years are over. I am far less concerned about inflation than i am about the distinct possibility of losing money at this stage of my life. If the market shoots up then so be it i dont care. I do not buy into the idea that one simply has to have equities in their portfolio. IMHO

reggiesimpson wrote:Todays WSJ commented that equities are at a five year high and the "chart" is getting ominous. I plan on selling the few stocks i have left and i wont look back. Taking a profit is called winning.

Did the same thing today. My last stock I owned went up 18% so I sold it all! No more stocks, all index funds. I'm officially a Boglehead. It feels great.

reggiesimpson wrote:My brother, who is a day trader for a company, told me he sold all of his personal US and international stock funds today.

You sure he doesn't close out all his positions on week ends?
He closes all his positions before each day ends, not only the week. He does very well at the day trading job -- again, it's not his money, it's the company's money. But in hi personal money he thinks the market is horribly set for a large multiyear fall. I hope he's wrong and I don't tell him I use a 2 fund portfolio.

reggiesimpson wrote:Todays WSJ commented that equities are at a five year high and the "chart" is getting ominous. I plan on selling the few stocks i have left and i wont look back. Taking a profit is called winning.

Did the same thing today. My last stock I owned went up 18% so I sold it all! No more stocks, all index funds. I'm officially a Boglehead. It feels great.

Yes, it troubles me. As soon as I read the headline, I thought, "OK, this is where all the foolish sell-low, buy-high investors jump in, only to have the market crash again, just to punish those fickle investors--again. And of course they'll bring me down with them."

Not that I'm going to do anything about it other than staying the course.

After reading Bernsteins "Four Pillars of Investing," I know that long-term stock prices will be want they will be, regardless of short term fluctuations, so I'm not worried.

reggiesimpson wrote:Todays WSJ commented that equities are at a five year high and the "chart" is getting ominous. I plan on selling the few stocks i have left and i wont look back. Taking a profit is called winning.

Did the same thing today. My last stock I owned went up 18% so I sold it all! No more stocks, all index funds. I'm officially a Boglehead. It feels great.

And you will still feel the same great way when the stock you sold soars another 18% on Monday, right? And still the same when it soars another 18 on Tuesday?

reggiesimpson wrote:Todays WSJ commented that equities are at a five year high and the "chart" is getting ominous. I plan on selling the few stocks i have left and i wont look back. Taking a profit is called winning.

Did the same thing today. My last stock I owned went up 18% so I sold it all! No more stocks, all index funds. I'm officially a Boglehead. It feels great.

And you will still feel the same great way when the stock you sold soars another 18% on Monday, right? And still the same when it soars another 18 on Tuesday?

Of course not. I'll probably kick myself and think what might have been.

Toons: so many of the Times readers posting comments seem to be somewhere between the 'contempt' and 'doubt and suspicion' levels ( 'The market is rigged', 'I'm never going to put any money in the market', 'I keep my money under the mattress', 'I've taken everything out in 2008 and will never invest again' etc.) But there seem to be a few Bogelhead types at the 'confidence' level.

Naikansha wrote:Toons: so many of the Times readers posting comments seem to be somewhere between the 'contempt' and 'doubt and suspicion' levels ( 'The market is rigged', 'I'm never going to put any money in the market', 'I keep my money under the mattress', 'I've taken everything out in 2008 and will never invest again' etc.) But there seem to be a few Bogelhead types at the 'confidence' level.

"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

The headline implies that it is the small investors that are driving up stock prices.
But as I understand it, small investors make too small of a % of overall purchases of equities to have that kind of effect (perhaps a fraction of a %, but not the kind of growth in the last 2 months).

Please correct me if I'm wrong. (It could depend on what is meant by "small investor" & I'm interpreting that to mean individuals (not billionaires), not pension funds, etc.)

There's a lot of bumps along the way, but I think the past 12 years has really skewed the perspective of markets to most investors, thinking that "all time highs" mean that the market is somehow overvalued, simply because the past decade has not seen those highs hit frequently...

but, historically, the market hits "highs" very frequently, which is expected. if it didn't, the market wouldn't return 8-10% annually over 30 years.

lindisfarne wrote:The headline implies that it is the small investors that are driving up stock prices.
But as I understand it, small investors make too small of a % of overall purchases of equities to have that kind of effect (perhaps a fraction of a %, but not the kind of growth in the last 2 months).

Please correct me if I'm wrong. (It could depend on what is meant by "small investor" & I'm interpreting that to mean individuals (not billionaires), not pension funds, etc.)

This is largely true, and at last count retail investors were still fleeing stocks for "safer" assets.

It's really amazing, though, that so-called "small investors" regain faith only when the market makes new highs. There is probably a correction in the not too distant future, but this should not trouble long-term investors.

Having sold in a fairly significant way on three occasions since the bottom to adhere to my AA through re-balancing I am less troubled by this headline.
No-one personally has told me lately that they are "getting in".
When that inevitably happens I'll grimace, wish them good luck with that and check my AA again to make sure I'm not overweight equity.

MnD wrote:Having sold in a fairly significant way on three occasions since the bottom to adhere to my AA through re-balancing I am less troubled by this headline.
No-one personally has told me lately that they are "getting in".
When that inevitably happens I'll grimace, wish them good luck with that and check my AA again to make sure I'm not overweight equity.

I will say this. I randomly, in passing, mentioned stocks are approaching an all time high and I didn't get any chitter-chatter in the office. I even got a--- "yeah I still don't trust them". So I will say that the lay population is still uneasy. I wasn't around during the whole late 90's stock market frenzy but there is definitely no frenzy at the workplace.

awval999 wrote:I will say this. I randomly, in passing, mentioned stocks are approaching an all time high and I didn't get any chitter-chatter in the office. I even got a--- "yeah I still don't trust them". So I will say that the lay population is still uneasy. I wasn't around during the whole late 90's stock market frenzy but there is definitely no frenzy at the workplace.

I concur with this. The buy high sell low crowd aren't comfortable diving in quite yet.
I'll be curious when they do, what the equivalent will be to Janus Funds, Scudder Ultra and QQQ that will be touting.

So, we're where we were five years ago. And...
The market goes up and down, just like it always has and always will; rallies and corrects - repeat.
One thing interesting, is that money just started leaving bond funds.

"The stock market is a giant distraction from the business of investing." - Jack Bogle